M/S. RADHIKA COMMERCIAL PVT. LTD.,24-PARGANAS NORTH V. I.T.O., WARD - 14(3), KOLKATA, KOLKATA

ITA 1307/KOL/2024

AI Insights

The case involves M/s Radhika Commercial Private Limited, which appealed against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The appeal was initially delayed by 1406 days due to incorrect email notifications and the illness of the company's director, which the ITAT condoned. The primary issue in the appeal was the addition of Rs. 85,08,800 as unexplained cash credit under section 68 of the Income Tax Act, 1961, concerning share application money. The assessee argued that the share application money was from individuals with adequate creditworthiness and was received through banking channels. The ITAT noted the procedural lapses in communication and remanded the case for a fresh hearing to ensure substantive justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33071 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Unexplained cash credit; Fair market value
• Section: 250; 143(1); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH” KOLKATA SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No. 1307/Kol/2024 Assessment Year: 2017-18 M/s Radhika Commercial Private Limited, Chandrapur Digha Duttapukur, Parganas North, Kolkata - 743248 [PAN: AABCR2032H] ............…...…………….... Appellant vs. Income Tax Officer, Ward-14(3), Kolkata, Aayakar Bhawan, Poorva, 110, Shantipally E.M. Bypass, Kolkata - 700107 ..............…..…..................... Respondent Appearances by: Assessee represented by : Abhishek Bansal, AR Department represented by : S.B. Chakraborthy, JCIT, Sr. DR Date of concluding the hearing : 06.02.2025 Date of pronouncing the order : 18.02.2025 ORDER PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. In this case, the ITAT Registry has pointed out that there is a delay of 1406 days in the filing of the present appeal. The assessee has filed a petition for condonation of the said delay as under: “The appellant do hereby most respectfully submits before your honours that in the present case, the appellate order is dated 24.11.2023. Accordingly, the last date to file the appeal was 23.01.2024. As such there is a delay of 141 days in filing the appeal. Regarding delay in filing of appeal, it is submitted that the hearing notices dated 21.09.2023, 18.10.2023 and 06.11.2023 were sent at incorrect email Ids ie. [e-mail] [e-mail] whereas the correct email Id was [e-mail] which was duly mentioned in the returns of income and at I.T.A. No. 1307/Kol/2024 M/s Radhika Commercial Pvt. Ltd. 2 which the intimation u/s 143(1) were sent for the AY 2020-21 to AY 2023-24. The latest email ID of the assessee company ie [e-mail] was also updated on e-filing portal. The e-filing portal does not show the email ID on which the appellant order was sent. However, it appears that the same would also have been sent at incorrect email. It is therefore the notices and order remained unnoticed by the appellant assessee. It is further submitted that the director of the company Mr. Ashis Kumar Sen looking into income tax related compliance was sick during the period from last six months.. The appellate order has come to notice of the appellant recently and thereafter the present appeal has been prepared and is being filed. However, in the process considering the date of order, there is a delay of 141 days. In view of the facts stated hereinabove, the appellant do hereby most respectfully request for condonation of delay. For this act of kindness, the appellant as in duty bound shall ever pray.” 1.1 Considering the reasons given in the said petition, the delay is hereby condoned and this appeal is admitted for adjudication. 2. The present appeal emanates from the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18, vide order dated 24.11.2023. 2.1 In this case, the Ld. AO added Rs. 85,08,800/- u/s 68 of the Act by way of unexplained cash credit on account of share application money received, which allegedly could not be verified. A recurring theme in the Ld. AO’s order is that the share application money could not be verified in the absence of evidence for ascertaining the applicants’ creditworthiness etc. In fact, the Ld. AO has mentioned in several places in his order that the relevant documents pertaining to such investments were not produced before him to enable the assessee to escape the rigours of section 68 of the Act. I.T.A. No. 1307/Kol/2024 M/s Radhika Commercial Pvt. Ltd. 3 2.2 Aggrieved with the action of Ld. AO, the assessee approached the Ld. CIT(A), where he could not succeed mainly on the ground that many notices issued fixing the dates for hearing were not responded to by the assessee. In fact, one of the grounds to be adjudicated by the Ld. CIT(A) was denial of opportunity by the Ld. AO to present the facts of the case before him. The Ld. CIT(A) thereafter, upheld the action of Ld. AO, admittedly through ex-parte order. 2.3 Since, the assessee could not succeed before the Ld. CIT(A), therefore, he has filed the present appeal with the following grounds: “1. For that the Ld. NFAC erred in confirming the assessment order passed by the Ld. AO which is otherwise bad in law as well as on facts. 2. For that the Ld. NFAC erred in passing the appellate order without providing the assessee any effective opportunity of being heard for the reason that the notices of hearing issued u/s 250 were served at old email IDs of the assessee company in spite of the fact that the new email Ids were duly available with the department. 3. For that the Ld. NFAC erred in ignoring the fact that the assessment order was passed by the Ld. AO without affording the assessee sufficient and effective opportunity of being heard. 4. For that the Ld. NFAC erred in confirming the addition of Rs. 85,08,000/-being share capital and premium raised during the year in spite of the fact that the assessee company provided the name, address and PAN of the investors (all of whom were individuals) regularly filing their returns of income, the amounts were received through banking channels and have adequate creditworthiness considering the contributed by them. amounts 5. For that the Ld. NFAC erred in confirming the addition of Rs. 85,08,000/-being share capital and premium raised during the year in spite of the fact that admittedly the issue price was not too high as compared to Fair Market Value of shares as per Rule 11UA of the Income Tax Rules, 1962 r.w.s. 56(2)(viib) of the Income Tax Act, 1961. 6. For that the Ld. NFAC erred in confirming the addition of Rs. 85,08,000/-being share capital and premium raised during the year in spite of the fact that admittedly the issue price was not too high as compared to Fair Market Value of shares as per Rule 11UA of the Income Tax Rules, 1962 r.w.s. 56(2)(viib) of the Income Tax Act, 1961.” 3. Before us, the Ld. AR argued with the help of paper book containing 79 pages and stated that the Ld.AO had sufficient material before him to arrive at a fair assessment of income of the assessee and the additions made by him were to be assailed. The Ld. AR stated that due to a I.T.A. No. 1307/Kol/2024 M/s Radhika Commercial Pvt. Ltd. 4 communication gap between the assessee and the Ld. CIT(A), the notices issued from his office could not be responded to. 3.1 The Ld. DR relied on the order of authorities below and pointed out that adequate documentary evidences were not presented before the Ld. AO. 4. We have carefully considered the submissions before us and heard the rival contentions. It is seen that in Ground No. 2, it has been mentioned that the notices issued from the Ld. CIT(A) office were on an old email I/D and hence the assessee could not receive them. It is felt that in the interest of substantive justice, this matter deserves to be remanded back to the file of Ld. CIT(A) for fresh adjudication. The Ld. CIT(A) would do well to ensure that the notices are issued on the correct address and correct email I/D. The assessee, on his part, would do well to present the full facts and documents before the Ld. CIT(A), and if required file additional details under Rule 46A of the IT Rules so that a fair assessment of the income of the assessee can be made. 5. In result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the court 18.02.2025. Sd/- Sd/- [Pradip Kumar Choubey] [Sanjay Awasthi] Judicial Member Accountant Member Dated: 18.02.2025 AK, PS I.T.A. No. 1307/Kol/2024 M/s Radhika Commercial Pvt. Ltd. 5 Copy of the order forwarded to: 1. M/s Radhika Commercial Private Limited 2. Income Tax Officer, Ward-14(3), Kolkata 3. CIT(A)- 4. CIT- 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches "